Zomato vs other listed peers: Analysis!

Zomato vs other listed peers: Analysis!

Last updated: 16 Jul, 2021 | 07:44 am

Zomato vs other listed peers: Analysis!

Zomato’s IPO is indeed a watershed moment for startups, as the listing would mark the first meaningful Internet listing in India. The company started operations in 2008, as an online food aggregator. It is the first Indian internet-based startup to go public. While it will be the only listed delivery-based startup in India, there are comparable listed global peers such as Meituan, DoorDash, GrubHub, Deliveroo, Just Eat Takeaway.com and Delivery Hero. How does Zomato stack up against each of these?

Zomato IPO: How does it fare on mcap and valuation?

  • At the higher end of the price band, Zomato is expected to command a market capitalisation of close to Rs 60,000 crore. 
  • If we compare it on an EV/sales basis with global peers, Zomato is available at 25 times FY21 EV/sales. Global peers such as Meituan, DoorDash, DeliveryHero are available at nearly half of this valuations. 
  • China-based Meituan is the largest, with an mcap of Rs 17.03 lakh crore.

Zomato Peer comparison: Revenue and profit

  • Almost all the companies are loss making in this segment, barring Meituan. DeliveryHero reported the highest loss in 2020. 
  • Zomato was able to narrow its losses to Rs 816 crore as compared to Rs 2,386 crore in the previous fiscal year.

Zomato’s EBITDA and PAT margins

  • At the EBITDA level; Meituan, Just Eat Takeaway as well as Grubhub were able to report positive figures. However, DeliveryHero has a 28.9% negative EBITDA margin. 
  • Zomato has reported an EBITDA margin of -6% in the previous fiscal, higher than DoorDash, Deliveroo and Delivery Hero. 
  • As explained previously, all the companies except Meituan have negative PAT, explaining the negative margins. 
  • DeliveryHero has the highest loss margin of 57%, while Deliveroo has a negative PAT margin of 17%. Zomato was able to reduce its loss margin to 10.68% from -92% in the previous year.

Users figures

  • In terms of number of orders, Zomato is one of the least, indicating the severely under-penetrated market in India. Zomato received 40.3 crore orders in FY21, as compared to 1,014.7 crore orders for Meituan. 
  • However, Meituan has a much higher number of total users at 51.1 crore, as compared to 1.1 crore users for Zomato (in FY20).